NEW YORK -- More than 20,000 construction
workers protested the city's use of a nonunion contractor in a
turbulent rally Tuesday that erupted into clashes with the police
and paralyzed traffic in midtown Manhattan.

The rally and a spontaneous march that followed
-- whose size and ferocity took city, police and even union leaders
by surprise -- left 18 police officers and three civilians hurt,
most with minor injuries, and 38 demonstrators under arrest, one
for assaulting a police horse, police said.

One protester was hospitalized in serious
but stable condition after being kicked in the head by a police
horse.

Amassing at the headquarters of the Metropolitan
Transportation Authority at 44th Street and Madison Avenue, the
demonstrators brought traffic to a standstill for blocks around
during the morning rush hour.

Afterward, thousands of demonstrators marched
across town toward the nonunion construction site at 54th Street
and Ninth Avenue, where several workers broke through barricades,
threw bottles and scuffled with the police, some of whom responded
with mace.

Police Commissioner Howard Safir acknowledged
that officers were caught off guard because the department anticipated
10,000 demonstrators, but, he said, there were 40,000 at the demonstration's
peak. The rally's main sponsor, the Building and Construction
Trades Council of Greater New York, estimated there were about
30,000 demonstrators, while some union officials said that there
might have been only 20,000.

Mayor Rudolph Giuliani, who blocked a protest
by taxi drivers earlier this summer by arguing that they were
trying to shut down the city, acknowledged that his administration
was surprised by the size of Tuesday's protest.

"Had the construction workers given
the same advance warning that the taxi drivers gave, they'd have
been dealt with in the same way," he said.

From around 8 a.m. to noon, much of midtown
Manhattan was crippled by the swirling crowds, as thousands of
burly, often shouting, construction workers roamed through the
streets, angering bewildered drivers, pedestrians and storeowners.
At the same time, police vehicles, sirens screaming, repeatedly
crisscrossed midtown as they scrambled to maintain control..

Some construction workers wrestled with the
police, climbed on cars, waved flags and threw garbage bags at
officers. Safir said he started with 550 police patrolling the
demonstration but quickly increased the number to 1,000. By walking
off the job, the demonstrators shut down several hundred construction
sites throughout New York City.

At a news conference at City Hall, Giuliani
assailed the demonstrators, especially those who attacked the
police. He said the city would sue the building trades council
to demand compensation for the damage and seek an injunction that
would severely punish future out-of-control demonstrations.

"We're just not going to tolerate this
kind of activity, whatever the nature of the dispute," Giuliani
said.

Paul Fernandes, a spokesman for the Building
Trades Council, said the rally's organizers also were caught unaware
by the spontaneous march and unsuccessfully urged the workers
to stop.

"We're apologizing not for the entire
demonstration, we're apologizing for any vandalism or violence
that occurred," Fernandes said. "If the police are saying
there were 40,000 people there, and 20 or 30 of them misbehaved,
well, we're not minimizing that they misbehaved, but most people
behaved properly."

He said the unions would make restitution
for any personal injury or property damage that was done by the
demonstrators.

The demonstrators gathered to pressure the
MTA to end its contract with Roy Kay Inc., based in Freehold,
N.J., that was awarded a $32.6 million contract to build a new
transit command center.

On three different occasions over the past
month, 1,000 to 2,000 construction workers have demonstrated at
the Ninth Avenue site. But frustrated that those protests were
gaining little attention and hardly seemed to be pressuring the
MTA, the construction unions spent the past 10 days organizing
Tuesday's rally.

The demonstration was another example of
the growing militancy that many of the nation's labor unions are
showing when the wages and jobs of their members are threatened.
But what was to be one of labor's proudest days -- it was one
of the largest union protests in New York in years -- turned out in many ways
to be an embarrassment because the street chaos greatly overshadowed
the unions' message.

After the demonstration, union leaders said
they were not planning any more demonstrations, saying the reason
was not Giuliani's warnings, but that they had finally gotten
their message across.

Many demonstrators said it was worth giving
up a day's pay to show they were serious about drawing a line
against Roy Kay and other nonunion contractors.

"This job's nonunion, and it should
be union," said Ralph Falco, a tile layer from Paterson,
N.J. "We can't afford to lose jobs like this."

MTA officials, who are permitted by law to
award contracts to nonunion companies, said that Roy Kay won the
contract because it was the lowest bidder. But union officials,
as well as an association of 1,000 unionized building contractors,
urged the MTA to drop Roy Kay, asserting that it is not a responsible
contractor and that the law requires that contracts go only to
responsible firms.

To make their argument, labor leaders pointed
to numerous safety violations by Roy Kay, to New York State's
investigating it for submitting false documents and to its workers'
rupturing a gas line at Rutgers University last year, causing
the evacuation of more than 100 students.

The Roy Kay contract is by no means the first
work the MTA has awarded a nonunion company. But union officials
said they believed it was important to protest the contract because
of Roy Kay's run-ins with the law and because they feared the
trend toward nonunion contracts was growing.

Under city and state law, contractors that
make the lowest bid generally win the job. But there is a caveat
-- the city and state can usually reject the lowest bidder if
it is found not to be a responsible contractor, for instance,
if it committed numerous environmental and safety violations.

Union officials insisted that Roy Kay should
be removed from the project, pointing to a report, entitled "Anatomy
of a Bad Contractor," that Anthony Weiner, a City Council
member from Brooklyn, did about Roy Kay. The report described
many of Roy Kay's violations, including two serious federal safety
citations the company received last November for failing to protect
workers from a cave-in during excavation work at Rutgers.

Building trades officials say they hope the
state Labor Department will soon bar Roy Kay. The company is under
investigation, having already been suspended after construction
unions provided evidence that it had submitted false documents
to qualify for a state program that trains construction apprentices.

A woman who answered the telephone at Roy
Kay's headquarters Tuesday said the builder had no comment about
the attacks against it.

In a telephone interview, MTA Chairman E.
Virgil Conway defended awarding the contract to Roy Kay. "Under
state law we are required to accept the lowest bid whether that
be union or not," he said.

But Edward Malloy, president of the building
trades council, said that was an incomplete reading of the law
because it forgot that bidders not deemed responsible can be rejected.